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Africa’s manufacturing sector – an awakening giant

Africa’s manufacturing sector – an awakening giant

Industrialisation is considered the engine of economic growth, leading to the accumulation of physical and human capital. In recent years, African countries have witnessed steady economic growth owing to their vibrant manufacturing sectors.

This has subsequently boosted exports of many African countries, supporting the diversification of their exports mix, and reducing their reliance on imports. Africa’s manufacturing sector has only witnessed the onset of its potential. While the cost of labour in developing countries is on the rise, the World Bank predicts that these manufacturing jobs could migrate to Africa within the next few decades.

African countries have taken commendable steps to boost the manufacturing sector. The launch of the African Continental Free Trade Area (AfCFTA) in March 2018 aims to create a single market for goods and services in Africa in order to facilitate industrialisation. Similarly, the African Union has committed to consider Africa’s manufacturing sector and prioritise it in its Agenda 2063. African governments are establishing special economic zones (SEZ) and developing flexible policies to attract investment.

It appears evident that African nations are persistently working towards repositioning themselves by means of significant policy changes. Governments, for instance, have committed to providing South African Small and Medium Enterprises (SMEs), manufacturing entrepreneurs and businesspersons demonstrating potential to contribute to social upliftment, job creation and economic growth, with varying financial support options. Such incentives include small business loans with relatively low interest rates, government approved tax breaks, cash grants and industrial financing. This will ensure recipients gain the momentum required to initiate their business operations.

Furthermore, governmental frameworks are underway to restore the scarce presence of marginalised communities in Africa’s manufacturing sector. Tools and programmes, such as the black industrialists and preferential procurement intends to empower black and female manufacturers to establish resilient and prosperous businesses in the industry.

If industry stakeholders remain committed to their objectives, Africa’s manufacturing output has the capacity to exceed US$1 trillion by 2025. In addition, approximately half of that production will be exported to other regions worldwide.

Moreover, Industry 4.0, otherwise known as “The Fourth Industrial Revolution” is being driven by IoT, machine learning, artificial intelligence and big data. Industry 4.0 is already in motion in developed economies, raising concerns as to whether Africa is prepared to capitalise on this progressive wave. However, industry experts ascertain that as an emerging market, Africa is free from infrastructure legacy issues, thereby demonstrating a higher level of flexibility than its developed counterparts. Considering this, the Fourth Industrial Revolution represents a significant opportunity for African manufacturers, ultimately placing the continent at the forefront of the global economy.

By embracing the multitude of opportunities that stand before African manufacturers, such as increased political stability, growing investment prospects, Industry 4.0, enforcement of policies empowering black and female manufacturers in addition to government funding incentives, the continent can aspire to compete on a global scale and realise its true potential at long last.

All these developments are testimony to the continent’s ability of attaining and maintaining a thriving manufacturing economy.

To further unlock Africa’s untapped potential within the sector, the Manufacturing Indaba, to be held in Johannesburg on 25 to 26 June, aims to converge the government, policy makers, manufacturers, financiers, industrial leaders and production managers on a single platform to shed light on what the future holds for African manufacturing within the next five years.

Up until recently, African manufacturing has appeared dormant, but the continent is an awakening giant that is set to disrupt its competitive rankings within the global sector.


 

About The Author

Guest Contributor

A Guest Contributor is any of a number of experts who contribute articles and columns under their own respective names. They are regarded as authorities in their disciplines, and their work is usually published with limited editing only. They may also contribute to other publications. - Ed.

Following reverse listing, public can now acquire shareholding in Paratus Namibia

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20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.